Although the majority of free cellular cholesterol is present in the plasma membrane, cholesterol homeostasis is principally regulated through sterol-sensing proteins that reside in the cholesterol-poor endoplasmic reticulum (ER). In response to acute cholesterol loading or depletion, there is rapid equilibration between the ER and plasma membrane cholesterol pools, suggesting a biophysical model in which the availability of plasma membrane cholesterol for trafficking to internal membranes modulates ER membrane behavior. Previous studies have predominantly examined cholesterol availability in terms of binding to extramembrane acceptors, but have provided limited insight into the structural changes underlying cholesterol activation. In this study, we use both molecular dynamics simulations and experimental membrane systems to examine the behavior of cholesterol in membrane bilayers. We find that cholesterol depth within the bilayer provides a reasonable structural metric for cholesterol availability and that this is correlated with cholesterol-acceptor binding. Further, the distribution of cholesterol availability in our simulations is continuous rather than divided into distinct available and unavailable pools. This data provide support for a revised cholesterol activation model in which activation is driven not by saturation of membrane-cholesterol interactions but rather by bulk membrane remodeling that reduces membrane-cholesterol affinity.